Jewel Tea Co. v. Watkins

• Decision Date: 11 January 1915
• Docket Number: 4120
• Citation: 145 P. 719,26 Colo.App. 494
• Parties: JEWEL TEA CO. v. WATKINS.
• Court: Colorado Court of Appeals

145 P. 719

26 Colo.App. 494

JEWEL TEA CO. v. WATKINS.

No. 4120

Court of Appeals of Colorado

January 11, 1915

Error to District Court, City and County of Denver; John H Denison, Judge.

Action by the Jewel Tea Company against C.E. Watkins. Judgment for defendant, and plaintiff brings error. Reversed and remanded.

J Foster Symes, of Denver (Ivor O. Wingren, of Denver, of counsel), for plaintiff in error.

CUNNINGHAM P.J.

Plaintiff and defendant entered into a contract whereby the latter became an employé of the former as a salesman. The plaintiff corporation was engaged in selling teas, coffees, and other culinary articles, from wagons driven by its employés over well-established trade routes in this state. The sole question presented for our consideration is as to the validity of a certain paragraph in the written contract entered into by the parties, which reads as follows:

"Party of the second part (defendant in error and defendant below) further agrees that he will not at any time while in the employ of the party of the first part, nor within a period of twelve months after leaving the services of the party of the first part, for any cause, for himself or any other person, persons or company solicit or take orders from, or deliver orders for teas coffees, baking powder, extracts, spices, cocoa, or other merchandise to any of the customers of the party of the first part, and especially agrees not to interfere with the trade or business of the party of the first part as now transacted or carried on with its customers in the territory in which the party of the second part has been working.

"Party of the second part further agrees that he will not directly or indirectly, through himself or others, take away or attempt to divert any of the custom, business or patronage of the party of the first part with its said customers in said territory within twelve months after leaving.

"Party of the second part further agrees, as a condition precedent, that he will not engage for himself or any other person, persons or company in the tea and coffee business, nor will he offer for sale any teas, coffees, baking powder, extracts, spices, cocoa or other merchandise during the life of this contract, nor during a period of twelve months after leaving the employ of the first party, for any cause, whether before or after the termination of this contract, in the cities of Denver, Longmont, Lafayette, Louisville or Erie."

We have italicized what we understand to be the phrase which has occasioned the dispute in this case. The aforesaid contract was dated September 15, 1913, and provided that it might be terminated by either party on giving the other two weeks notice. The contract was terminated on the 10th day of January, 1914, and thereupon, according to the allegations of plaintiff's bill, the defendant engaged in the business of selling and delivering orders for goods of the same general character as those referred to in the contract and to the customers of plaintiff on its established trade routes. The trial court sustained a general demurrer to plaintiff's bill, for the reason that in the opinion of the court:

"The restriction against soliciting for tea, etc., 'or other merchandise,' and in forbidding defendant to offer for sale teas, etc., 'or other merchandise,' is unreasonable, because going beyond what is necessary for the protection of the plaintiff, and the contract being unreasonable, in that respect, cannot be enforced in equity."

At the time of sustaining defendant's demurrer to the bill the trial judge further stated that "if the contract contained the words 'of a similar nature,' as stated in the complaint, it would not be open to this objection," referring to the objections set forth in that portion of the court's remarks which we have quoted. Thus it will be seen there is left for our determination but a single question, viz.: Is the contract in question, by reason of the clause which we have already quoted from it, vicious for the reason stated by the trial court? This question we think must be answered in the negative.

"A contract must be construed as a whole, effect being given to all its parts and provisions, when that can be done without working an injustice to either party, and when doubt exists, and the contract is susceptible of two constructions, the one working an injustice and the other consistent with the rights of both parties, the one which upholds the rights of the parties should be adopted." C., B. & Q.R. Co. v. Provolt, 42 Colo. 103, 93 P. 1126, 16 L.R.A.(N.S.) 587; Chicago, R.I. & P. Ry. Co. v. Denver & Rio Grande R. Co., 143 U.S. 596, 12 S.Ct. 479, 36 L.Ed. 277; Parsons on Contracts (9th Ed.) vol. 2, p. 661 et seq.; Page on Contracts (1905) §§ 1120, 1121; Beach on Contracts (1896) vol. 1, §§ 708, 709, 717.

"The primary rules for the construction of contracts are that the court may put himself in the place of the contracting parties, and then, in view of all the facts and circumstances surrounding them at the time of the execution of the instrument, consider what they intended by the terms of their agreement, and that when the intention is manifest it will control in the interpretation of the instrument, regardless of inapt expressions and technical rules of construction." Tillitt v. Mann, 104 F. 421, 43 C.C.A. 617; Messenger v. German American Ins. Co., 47 Colo. 448, 107 P. 643; Parsons on Contracts (9th Ed.) vol. 2, p. 655; Page on Contracts, § 1123; Beach on Contracts, §§ 712, 719.

"The circumstances surrounding the making of the contract and effecting the subject to which it relates form a sort of context that may properly be resorted to *** in determining the meaning of the words and provisions of the contract." McKeesport M. Co. v. Ben Franklin Ins. Co., 173 Pa.St. 53, 34 A. 16, quoted with approval in Messenger v. German Am.Ins. Co., supra; Farrell v. Garfield M.M. & S. Co., 49 Colo. 159, 111 P. 839; Fearnley v. Fearnley, 44 Colo. 417, 98 P. 819; Page on Contracts, § 1106; Beach on Contracts, § 711.

Considering the contract before us in its entirety, it is quite apparent that the object and purpose of the contract was to restrain the defendant from quitting the employ of the plaintiff and thereafter on his own behalf, or as the salesman for another, to avail himself of the advantage of acquaintances he had made with plaintiff's customers while in the employ of plaintiff, and thus divert from plaintiff trade which it had built up. The recitals in the contract make its object and purpose perfectly apparent. In part they read as follows:

"Whereas, said party of the second part desires to enter the employ of the party of the first part, and by virtue of such employment will be enabled to discover and acquire full knowledge of the methods used by the party of the first part in conducting its business in the buying, selling, testing, keeping and distributing teas, *** and other merchandise, *** and will necessarily become acquainted with the customers and residences along and in such

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